1.At August 31, the company owed its employees $800 in salaries and wages that will be paid on September 1.
Dr. Salaries and Wages Expense 800
Cr. Salaries and Wages Payable 800
2.On August 1, the company borrowed $30,000 from a local bank on a 15-year mortgage. The annual interest rate is 10%.
Dr. Interest Expense 250
Cr. Interest Payable 250
3.Revenue for services performed but unrecorded for August totaled $1,100.
Dr. Accounts Receivable 1,100
Answer-----------The entry for the first adjustment to record salaries expense of $800 is absolutely correct.
Answer-----------The entry is correct.
Amounts debited and credited are correct assuming adjustment is made on August 31. Interest expense will be debited for $250 and interest payable will be credited for $250. Following entry will be passed on december 31
|Interest expense||$ 250.00|
|Interest payable||$ 250.00|
Answer---------The adjusting entry passed is correct in all respects.
Accounts receivable will be debited and service revenue will be credited for $1100.
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